ATV owners may qualify for tax refund

Ontario’s Ministry of Revenue has informed the Insurance Brokers Association of Ontario (IBAO) that all-terrain (ATV) owners might be eligible for a tax refund based on the classification under which they may have insured their vehicles.
Prompted by an IBAO request, the ministry’s recent ruling resolves an issue about the amount of taxes ATV owners owe, which in turn is based on whether ATVs are required to be insured under the Compulsory Automobile Insurance Act (CAIA) or the Off-Road Vehicles Act (ORVA).
ATVs insured under the CAIA had their retail sales taxes phased out gradually between 2000 and 2004, whereas those insured under ORVA are subject to a higher and continuing tax rate of 8%.
In a letter to Ontario’s brokers, the ministry said in situations in which “ATVs are authorized under the ORVA to be driven beyond one’s own property, there is a requirement for these ATVs to be insured under the CAIA, whether driven on trails, roads or on parts of certain highways in accordance with Reg. 316/03 of the [Highway Traffic Act, which comes under the CAIA].
“RST [retail sales tax] is therefore payable on the insurance premiums based on the declining tax rates [as phased out in 2000-04].”
The ministry thus concluded some consumers might be eligible for tax refunds depending on their ATV usage pattern and policy.
IBAO said it wanted to make sure Ontarians were treated fairly when it comes to premiums and taxes, and hence the request for the ruling.
“We encourage those people who may be eligible [for a tax refund] to contact their local insurance broker,” IBAO CEO Randy Carroll said in a press release. “Their IBAO broker will then help them apply for this refund, if applicable to them.”